Panama: Investing

FDI in Figures

Panama is the first recipient of FDI in Central America with an annual average of USD 1.75 billion of FDI flows between 2004 and 2009. Despite the slowdown observed in 2009 due to the bad international situation, the FDI flows started to rise again in 2010 and they should maintain their dynamic growth. This good performance is due to the advantageous regulations for FDI and the incentive measures that the country has adopted. Panama benefits of good financial and investment freedoms; commercial operations are, in general, subject to transparent rules; the tax rates for individuals and for companies are moderate; there are significant customs and tax advantages in the Colon Free-Trade Zone (CFZ).  The strategic geographical location of the country, its dollarized economy and its economic specialization in the strategic sectors (banking, maritime traffic) are some of the many factors that attract FDI.

Why You Should Choose to Invest in Panama

Strong Points

Panama's strong points are:
- Its political stability. The country is "protected" by the United States;
- Its economic stability. Inflation level is maintained at 2% and the country does not carry any devaluation since its currency is in parity to USD;
- Reduced taxes, with a 0% value added tax (VAT) in the real estate sector;
- Credit facilities: Mortgages up to 30 years; credit can be up to 80% of the real estate's value;
- Large development of the real estate sector with new constructions;
- Easy process to develop tourism projects with significant tax exemptions;
- Easy process to create and develop manufacturing industries.

Weak Points

Panama has some weak points, especially:
- Irregularities concerning property rights;
- Freedom of non guaranteed work;
- A high level of corruption, notably in the public administration;
- A slow judicial system.

Government Measures to Motivate or Restrict FDI

The Panamanian government and the business milieu actively encourage direct foreign investment. In general, the laws do not make any difference between national and foreign companies. In 1998, the government enacted a law of investment stability, which guarantees foreign investors who invest at least two million dollars in Panama, equal treatment by virtue of the law and not by their domestic competitors. By virtue of law No. 41 of 2007, Panama has encouraged multinational companies to open their regional headquarters on its territory through a variety of different tax incentives.

Procedures Relative to Foreign Investment

Freedom of Establishment

Guaranteed

Acquisition of Holdings

Majority holding interest in the capital of a company in Panama is legal. However, all foreign investors must obtain a work permit from the Ministry of Employment.

Obligation to Declare

The foreign investment promotion agency in the country enables one to be informed of the authorizations required to set up.

Competent Organization For the Declaration

Panama Chamber of Commerce (Spanish only)

Requests For Specific Authorizations

Some importation conditions (e.g. imports exempt of custom duty) or certain merchandise requires prior authorization from relevant Ministries.  Amongst the merchandise, preliminary formalities specifically relate to equipment for the oil industry, household appliances, cars and naturally, products for human consumption for which one needs to obtain different registrations, in addition to a sanitary registration.

Investment Opportunities

Investment Aid Agency

Invest in Panama

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Panama
Inter-American Development Bank, Tenders in South America
Globaltenders, Tenders & Projects from Panama
DgMarket, Tenders Worldwide

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